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Excise dept asks SpiceJet to pay ‘GST dues’ of Rs 285 cr to Haryana

According to the order, SpiceJet owes Rs 163.22 crore in forward charge liability and a reverse charge liability of Rs 122.64 crore from 2019-20 till September 7, 2021, to the Haryana government.

Written by Khushboo Narayan | Mumbai |
September 22, 2021 3:45:48 am
As per the order of the Excise and Taxation Department, SpiceJet owes Rs 163.22 crore in forward charge liability and a reverse charge liability of Rs 122.64 crore from 2019-20 till September 7, 2021, to the Haryana government. (File photo)

The excise and Taxation Department of Haryana has asked SpiceJet Ltd to clear Goods and Services Tax dues of Rs 285.86 crore after rejecting the airline’s proposal to clear its admitted dues in instalments, as per a September 10 order of the tax authority.

According to the order, SpiceJet owes Rs 163.22 crore in forward charge liability and a reverse charge liability of Rs 122.64 crore from 2019-20 till September 7, 2021, to the Haryana government.

In an email response to queries, the spokesperson for SpiceJet said, “The GST outstanding amount mentioned in your query is completely wrong and baseless. The outstanding amount, as has been widely reported in the media, is Rs 80 crore. The outstanding amount is mainly under reverse charge mechanism and not something which the company has collected and not paid and your query on that count is completely wrong and we strongly deny it.”

The company said the High Court had observed that SpiceJet’s plea for paying dues in instalments is a fair one since the operations were curtailed due to Covid pandemic. “The matter is pending adjudication before the court.It should be noted that SpiceJet has already progressed on the payment of GST liabilities as per the plan submitted by the company demonstrating its bonafide,” the airline added.

In July, the tax authority issued a notice to SpiceJet, asking it to clear its dues. However, the airline approached the Punjab and Haryana High Court with a plea to quash the tax notice and allow them to clear dues in instalments.

On August 17, the High Court passed an order, asking the Excise Department to hear the repayment proposal of the airline and pass a speaking order in the case within two weeks of receiving the certified copy of the High Court ruling. Subsequently, the tax authority allowed personal hearings to the airline on August 31 and September 7 and three days later, on September 10, the tax agency turned down the payment proposal of SpiceJet.

The tax order said SpiceJet, in its representation to the Department on September 7, proposed to “discharge the total estimated liability of Rs 285.86 crore up to September 2021, which includes reverse charge liability of Rs 122.64 crore and forward charge liability of Rs 163.22 crore”.

The tax order added that of the Rs 163.33 crore forward charge liability admitted by SpiceJet, the company has declared only Rs 128.53 crore in its returns.

“I find that the liability of Rs 34.69 crore has been collected but not declared by the applicant in Form GSTR -1,” said the order.

The order added, “I find that the power to pay in instalments is provided under Section 80 of the HGST (Haryana GST) Act, 2017 … On a close reading of the said Section, it is clear that the Section does not enable the payment of tax liability in instalments in cases where the tax liability is due as per the liability declared by the taxpayer in any return. Herein, I find that the applicant has self assessed and declared an amount of Rs 128.53 crore in the form GSTR-1 … but the same has not been discharged either through cash or input tax credit in Form GSTR-3.Therefore, I find that I have no statutory power under HGST Act, 2017 to provide for instalments for such amount.”

The order said the bank guarantee offered by SpiceJet under the repayment proposal is not “an adequate collateral or guarantee in the event of default”.

Under the HGST norms, extension of time for payment of taxes is allowed only for liabilities that have not been self-assessed by the taxpayer in any tax returns.

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